Financial Move-Outs (FMOs)

Purpose (Why we do this):

We have standards in place for closing accounts & adjusting financial move-outs (FMOs) to ensure we are completing a legal, fair process each & every time a resident moves out. Adhering to these policies will not only maximize our collection efforts but will also reduce the threat of lawsuits. 

Policy (What you're supposed to do):

Closing an account & preparing for Bad Debt collections:

• Review the resident ledger one week prior to move-out. Add any missing rent, late fees, violations, etc. Attempt to collect these fees while the resident is still living on the property. 
• All itemized charges should be described in detail on the breakdown of charges. For example, "MISC Fees $244.19" does not provide us with sufficient detail to know what the charges are for. Specify the difference between the level of charges (example, carpet clean versus carpet repair versus carpet replacement). 
• Make sure that you have backup documentation for all listed charges. For example, if there are charges for carpet replacement, be sure that you have a carpet replacement pictures and invoice in your files. 
• Retain documentation of resident requests or complaints related to their unit or the community. Have documentation of the date & actions taken to resolve their complaint. Some of these complaints will automatically be notated via service request, others might involve entering manual notes in the Entrata activity log. 
• Make sure to include as many photos as possible for the damages. 
• Move-in & move-out inspection sheets should be detailed & available in case the previous resident  disputes & requests verification of debt. 
• Only add charges that are fair & reasonable. Review the activity log & confirm that any notes pertaining to charges have been updated. 
• All payment plans must be created in Payready. The residents are required to sign up for recurring payments for their payment plans. This allows us to keep them accountable for timely payment.

Guidelines for property adjusting an FMO:

• No legitimate charge should be waived or removed due to lack of photographic proof without first:  
      -Attempting to locate/request a vendor invoice for repairs related to the damage 
      -Referencing any prior inspections including the move-in inspection completed by the resident  
  -Coordinating an attempted negotiation with the past resident & manager. 
• All adjustments to FMO statements must be approved by the property manager. 
• Any adjustment to the FMO must be documented under the activity log in Entrata with a clear explanation as to why the adjustment occurred. 
• All adjustments should be handled consistently to avoid fair housing compliance issues. 
• All revisions must comply with state & local laws. This could include length of time an FMO is eligible for revision, method of required revision delivery, & who need to receive the revision. When in doubt, print a revised final statement & physically mail it to the last know forwarding address for both the past resident(s) & guarantor(s). Combining this with any ongoing phone/email communication should sufficiently fulfill most state requirements. All FMO charges should be finalized by the state deadline. Once that deadline has passed, you may no longer increase the final balance. 
• All adjustments must be submitted via Zendesk. Please email hrarecovery@horizonra.com and cc your property’s bad debt representative for the fastest response. 
  

Procedure (HRA Way!):

• Link to training